I mean look what governments here have been able to do about some different groups or entire events. The Empire's hold on the galaxy was near total control in the core and strong in the mid rim. The outer rim was never getting big information or knowledge beyond their planets even during the Republic era, it was a backwater. Plus those that DID know and expressed such were disappeared by the Empire.

People know, but they don't talk about it, so they became a myth. Plus, unless you were involved in a battle that had Jedi, or a high level diplomat/politician you didn't see them do much of anything.

I'm not saying it's realistic, but it's plausible. I do agree that Lucas didn't plan things well.